Thursday, June 20, 2019

"Jeff Bezos on breaking up and regulating Amazon" (AMZN)

That's the headline from a 2018 story, reposted below. First though, Knowledge@Wharton:

Is Amazon Getting Too Big?
In an era when legacy retailers such as Sears and Macy’s are scaling back or going bust, online behemoth Amazon continues to boom. The company is the second-largest retailer in the United States behind Walmart, and last year it became the second company in the world to reach $1 trillion in market capitalization. Perhaps more significantly, it’s also one of the world’s largest tech companies, with reams of data collected from an enormous customer base. Amazon has sold 100 million units of its voice assistant, Alexa, and an equal number of Prime subscriptions. But is Amazon too big?

Amazon’s runaway growth has prompted questions about whether it has become a massive monopoly that has unfairly edged out smaller competitors. That question has caught the attention of consumers and policymakers, many of whom have called for legislation to regulate the global goliath. The question, while intriguing, seems to be a moot point for founder and CEO Jeff Bezos, who reportedly said his company is “not too big to fail.”

“I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years,” Bezos said, according to a report by CNBC.
The Knowledge@Wharton radio show on SiriusXM invited two experts to discuss the potential backlash to Amazon’s unbridled growth. Wharton marketing professor Barbara Kahn and Ryan Hamilton, marketing professor at Emory University, tackled the topic during a recent interview. (Listen to the podcast at the top of this page.) Following are key points from their conversation.
Regulation Isn’t the Same as Antitrust
The power amassed by Amazon and other tech giants hasn’t gone unnoticed by American politicians. Last year, President Donald Trump launched a Twitter attack against the company and The Washington Post, which is owned by Bezos. In March, Sen. Elizabeth Warren, D-Mass., unveiled a plan to break up Amazon and other companies making $25 billion or more in revenue. But the professors pointed out that subjecting big tech to antitrust laws, which take aim at monopolies that have pushed out competition, is different than enacting legislation to regulate that sector.
“Typically, when you think about antitrust, you think about whether the consumer is worse off. And Amazon has been so far pretty clean on that,” Kahn said, adding that Amazon hasn’t lowered product quality or raised prices. The company also appears to be transparent with its customers.
However, more than half of American households now subscribe to Amazon Prime, so Amazon controls a massive amount of online shopping data in an asymmetric way against the competition.
“There’s nothing that Amazon isn’t touching.” –Barbara Kahn
“I think there are a lot of different issues,” she said. “Historically, what people think about Amazon is that they have so far been true to their word and their consumer focus. But they are ruthless against the competition.”....

And the headliner, May 4, 2018:

"Jeff Bezos on breaking up and regulating Amazon" (AMZN)
Spoiler alert!

You're ahead of me.
Still, an interesting interview.

From Business Insider:
Amazon CEO Jeff Bezos and Axel Springer CEO Mathias Döpfner discuss the need to regulate large tech companies, the possibility of breaking up Amazon, and the importance of scrutinizing big institutions. Following is a transcript of the video. 
Döpfner: But, your most prominent critic at the moment is the President of the United States. People are even saying that he may be willing to prepare initiatives to break up Amazon, because it's too big, it's too successful, it's too dominant in too many sectors, or for varied other reasons, including the fact that he doesn't like the "Post". Is this break up scenario something that you take seriously, or do you think it's just a fantasy? 
Bezos: For me again, this is one of those things where I focus on and ask our teams to focus on what we can control, and I expect - whether it's the current US administration or any other government agency around the world - Amazon is now a large corporation and I expect us to be scrutinized. We should be scrutinized. I think all large institutions should be scrutinized and examined. It's reasonable. And one thing to note about is that we have gotten big in absolute terms only very recently. So we've always been growing very fast in percentage terms, but in 2010 just 8 years ago, we had 30,000 employees. So in the last 8 years we've gone from 30,000 employees to 560,000 employees. You know in my mind I'm still delivering the packages to the post office myself. You see what I'm saying? I still have all the memories of hoping that one day we could afford a forklift. So obviously my intellectual brain knows that's just not the case anymore. We have 560,000 employees all over the world. And I know we should be scrutinized and I think it's true that big government institutions should be scrutinized, big non-profit institutions should be scrutinized, big universities should be scrutinized. It just makes sense. And that's, by the way, why the work at the "Washington Post" and all other great newspapers around the world do is so important. They are often the ones doing that initial scrutiny, even before the government agencies do. 
Döpfner: The general sentiment concerning the big innovative tech companies has changed. Facebook, Google, Amazon, Apple - they used to be seen as the nice guys in T-shirts that are saving the world. Now they are sometimes portrayed as the evil of the world. And the debate about the Big 4 or the Big 5 is heating up: Professors like Scott Galloway and "The Economist" are suggesting a split-up, other powerful people like George Soros are giving very critical speeches at Davos, and the EU Commission is taking pretty tough positions here. Do you think that there is a change in the mindset of society, and how should the big tech companies, how should Amazon deal with that?

Bezos: I think it's a natural instinct, I think we humans, especially in the western world, and especially inside democracies are wired to be skeptical and mindful of large institutions of any kind....MORE